02/20/2012

Operations Management Decisions Of Starbucks

Assignment 2

Operations Management Decisions: Starbucks

Introduction

In order to stay competitive in the
marketplace and to ensure marketability, the management should be able to
provide high quality products with affordable cost, timely delivery and
flexibility. In addition, the
management should also have the ability to differentiate the product
offered. Such factors are the responsibilities of the operations managers. In
this regard, the management should make an efficient decision in ten aspects of
operation management system.. This paper will analyze Starbucks in line with
these aspects.

Overview of Starbucks

Starbucks Coffee has been known in the global market as one of the fastest
growing brands. The objective of the management is to establish a unique and
competitive brand in the market. The
operational strategy of the
coffee business is to attain their business enterprise aims through their
rapid expansion in terms of retail operations in the global market scene.
Starbucks’ vision is to be greatly recognized in the global market and in order
to attain this
operations managers believed that Starbucks they should be able to adhere to
the 10 critical decisions of operations management.

Starbucks’ Analysis 10 critical decisions

Indeed, making an
industry successful in particular setting
demands needs detailed studies as well as examination of the factors which
will create the best results which will enable the company to meet their
objectives. One of the critical decisions for considering strategic operations
management is in terms of the product and design decision. Accordingly, product
and service designs affect most of the change and transition approach. They are
the ones which identify the costs of operations and also the quality of the
offered products or services. In this regard, the management should be able to
develop
product design approaches in accordance with the changes and
trends in the market place to sustain marketability and market share of the
business enterprise.

In case
of Starbucks, the business enterprise purchase and roast
high quality whole coffee beans and sell these to their consumers with
enriched
Italian style espresso coffee beverages along with confections and pastries
and other coffee-related product that are sold directly within their stores and
branches. In addition, Starbucks also provide coffee bean products in accordance
with the specialty sales groups as well as other retail industries. In addition,
the enterprise also attempted to innovate some of their coffee products that
made their clients become more interested. Such innovation include the
frapuccino coffee drinks and coffee latte and other premium product teas
produced by their subsidiary like Taso Tea Business enterprise (Thompson,
Strickland & Gamble, 2005).

The next thing to
consider is the selection of the location. It has been said that market location
depends on the nature of the business and it is noted to be the most critical
aspects for business enterprise success. The operations manager’s decision
affects costs like the operations management costs, transportation cost, as well
as rent and also human resource within the area. In the case of Starbucks, the
operations manager is able to consider convenient and marketable location for
the business enterprise. Accordingly, the location factor is considered to be
one of the important reasons why consumer chooses specific coffee shop. Most of
the Starbucks coffeehouse is located in shopping malls and those areas that are
near the commercial centers and areas. The location of the Starbucks are able
to make the business
enterprise become the number one choice for different consumers since they
perceive that coffee bars are an essential place to relax from busy lifestyles.

The third factor to consider in decision making
in operations management is the process as well as the layout design. The
selection of the right approaches as well as in making decisions on suitable
layouts and process affect management decisions to consider specific technology,
the kind of approaches with suitable layouts. In addition, this is done in line
with the procurement of the resources and also develops maintenance approaches.
Such is part of the strategy of Starbucks as they are able to consider
technologically advance layout design. The management of Starbucks have
initiated their online strategy by considering WI-FI-enabled branches and
stored. The business enterprise also permits diversification of their products
as they acquire Hear Music which is devoted in providing assistance to
individuals in line with the discovery of great music.

In addition, the operations manager of
Starbucks understands that the more they become to the needs of their clients,
the greater the possibility to gain customer loyalty, Hence, having strong brand
loyally permits the company to sustain competitive advantages and give them the
market opportunity to charge a premium price for its products or to sell more
coffee products to their clients. Hence, Starbucks conducts periodic market
research to be able to understand the preferences of their clients. In
addition, Starbucks establishes comfortable environment some wherein their
clients can relax or conduct business. The Starbucks has been able to introduce
broad-band Internet access to enable people to keep in touch with their business
or hold meeting while enjoying in their coffee offers.

As part of the operations management, a
business enterprise has to generate the right and efficient decision in line
with the capacity needs, human resource requirements, purchasing decisions, as
well as inventory requirements. This is also included in the process and layout
decisions in operations management since it have great effects in the processes
and materials to be allocated in relations with each other.

It
can be noted that the Starbucks’ operations consists of coffee roasting
activities provided to their consumers. In line with their operational
capacities and capabilities by modifying their operational competencies which
include internal approach and linkages with their suppliers as well as partners
and the manners in which managed their entire operations (Buyers & Lindahl,
1999).

It can be said that Starbucks management
has been able to adhere to other critical decisions in operations management.
Part of the operations management decision of the business enterprise is their
decision to expand Starbucks through their' flexibility as well as innovation.
To be able to cope with the effects of market changes and to have sustainable
competitive advantage, the operations manager of Starbucks has been able to
expand and improve the business enterprise so as to conduct business operations
as well as activities on a global market which involves market expansion of
Starbucks through the store presence of their brand in various parts of the
world.

Operations management in decision making in
Starbucks have been able to deal with their inputs, changes and outcomes which
differ across the branch of the business enterprise and markets. In Starbucks,
gaining customer loyalty is part of their operations management decision (Chow &
Holden, 1997). By providing the customers their demands in the market place,
Starbucks are able to gain loyal consumers who buy their products even at its
highest price.

The Starbucks Coffee
outlets operate under the business enterprise logos and symbols as each store
provide large range of special product offers targeting executives,
professionals and even students. Starbucks Coffee offers unique blends of coffee
products which roasted into perfections.

The
operations management is conventionally characterized as a stable system in
which components as well as products or services move smoothly from the business
enterprise to end consumers. Operations management design models considered
decisions making process which are worth millions of dollars (Hane & Sudar,
1998) McKinnon's interview study found that Operations management managers are
responding to such pressures by such actions as increased back loading, improved
business operations, the redesign of packaging as well as changes in the
ordering system (McKinnon, 1998).

Part of the capacity and capability process of
Starbucks is its strategic operation management through changes in packaging,
special offers like freebies as well as convenient stores and providing the
latest trends in the coffee market to meet changing needs and demands of their
consumers. Starbucks Coffee is able to competitively stay in business catering
specifically to middle-class to class A sector of the population. Starbucks
Coffee highly considered the enterprise’s focus to its niche market highlighting
the values of quality and economical purchasing behavior. The operations manager
of the Starbucks permits various people in this market segment to choose freely
from the stores broad range of coffee products.

The operations management concerns in the
coffee market industry is normally confronted with different challenges which
address speed as well as a reliable delivery system of the business enterprise
as business operations essentials to compete competitively in today’s global
trade

Starbucks operates through their branches and
store to serve its promise of providing high quality and increased value of its
coffee products and services. Efficient deliveries of their supplies as well as
efficient demand forecasts of coffee products needs which the Starbucks accounts
to enable effective business operations in every locale that it serves. The
operations manager of Starbucks also consider cost-effective as well as
time-efficient routing and product placements, and include storage approach as
the keys to the business enterprise’s achievements to become one of the most
recognized coffee market industry. The business enterprise’s high consideration
to their coffee products perishability as well as tangibility, trends in coffee
products demands and strategic operations management made it possible for the
Starbucks to continue its operation and initiate expansion plans to other
locales (Daft, 2003)

In terms of human resource
management, Starbucks has been able to consider having efficient management of
cultural diversity. Since, they are considering international market, the
management sees to it that they are able to adapt to the culture of their
employees. In doing so, Starbucks has been able to utilize four aspects of
management styles which consider transformation view, power, paradigm shift and
also their social responsibility view (Proctor, 2000). Into his regard, the
management of Starbucks has focused on the area of transforming their employees
to be a good source of providing and meeting the changing needs of the global
market. In this regard, the human resource management of Starbuck has been able
to provide visionary value. The employee management approach has been able to
enhance not only the manager’s way of managing as well as facilitatiting their
subordinates but most specifically the fact that it develops both the
performance of their employees and the organization which is seen in the entire
operations of Starbucks. Furthermore, the management of Starbucks provides
decisions making in enabling their employees to be motivated and be morally
matured in controlling their responsibilities. Moreover, it enhances their
ability to become more flexible, innovative and creative leading to have
employees with self-satisfaction and self-fulfillment. The Starbucks provides
intensive training and education for their employees. Through the human resource
management used as part of the operations management approach in Starbucks, the
company has been able to continuously meet their business goal.

The operations manager should also
consider the inventory process as part of the operations management approach
(Waller et al, 1999; Chen et al, 2000). Herein,
the management should see to it that their needed products for specific
operations such as one week or one month are given emphasis to avoid problems in
providing end products to consumers.

Conclusion

Starbucks is truly one of the largest and most
recognized coffee industry in the global scale. But it is undeniable that large
industries are always entitled in considering efficient management approach,
specifically in their operations.. In order for Starbucks to continuously grow
in the market environment, it is significant that the operations manager will be
able to consider the 10 critical aspects of decision making.

Apparently, such ten critical decisions in operations management are very
important to identify the business enterprise’s success top be able to fulfill
their mission, vision and objectives. Only by considering strategic operations
decisions and review such in timely basis in ensuring that the decisions made
are feasible for the present market condition, the Starbucks will be able to
pass all problems and hassles in the future of the business.

In summary, the plausible
operations management approach of Starbucks cited in this report had been
selected based on the operations management system approach. Generally, these
operations management decisions making can be of benefit the company not only in
terms of gaining profit as well as market share but also in overcoming
management issues.